Having to actually level-up characters to get their newer spells works for games such as ff4. Personally I dislike the idea. I've been kicking around some newer ability aquiring methods for Vikings, in hopes of spicing it up further.

Option 1 - Abilities are learned after battles by having heroes equip various weapons. There would be a weapon chart, where EVERY equip-able weapon has 2 or 3 spells it can teach, at various random % chances. So a longsword may teach Spinstrike with a 10% success rate, while the Falchion may have it at 50%. This plays very similar to FF9's ability learning system, except you only have to fight so many battles to aquire the skill by chance. This also has the added benefit of limiting various skills to each area, so you can't get something game-breaking like INSTANT DEATH SPELLS in the first area. The downside is that the after-battle scripts would be HUGE.

Option 2 - A gamelong subquest that involves obtaining various gods' blessings by performing tasks (bring Thor a replacement hammer from the blacksmith, give Odin some horseshoes for his horse). After completing these tasks, the gods simply bestow these spells on the party. Again, the quests involved could be tied to various areas of the game, so you can only aquire them as the game progresses. This method would also reward exploration of the game's areas.

Option 3 - Buy them in towns, possibly from a sage in the alchemists' shops. I personally hate this method but it could be very easily done, and is more interesting than simply gaining them from leveling up._________________Vikings of Midgard - 98%
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Option 2 will take the most work, but will fit the game better IMO. You could also have some fun mythological/community references._________________Check out Motrya, my original RPG!
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try a mix of all 3 options, along with the current system mixed in for good measure! Like, you could buy an instant death spell for $<big number> at an alchemy shop, a set of mini-quests for various gods, which give you spells related to that god's abilities, and that ff9-like thing, but you can also get some weaker spells by leveling up!